Key Takeaways From Expedia’s Restructuring

Given the vast number of OTA bookings, it’s hard to imagine that the top OTAs aren’t printing money. But news from Expedia Group this week paints a grim picture. The company is restructuring, laying off 12% of its workforce in an effort to “streamline and focus” the Seattle-based online travel giant. Another travel company, TripAdvisor, also recently announced that it would eliminate 200 jobs, representing about 5 percent of the total workforce.

After reporting strong fourth quarter results, Expedia Chairman Barry Diller and Vice Chairman Peter Kern said in a statement, “Since our management change in December we have re-focused the company on our core operations, which had suffered for much of 2019.” 

Expedia is targeting $300 to $500 million of annual cost savings. “Moving forward, we will exert more discipline in setting priorities and allocating resources, simplify our business processes and inter-dependencies, raise the bar on performance standards, and demonstrate and demand accountability for results,” Expedia leaders wrote in an  internal email.

One tidbit that we found interesting in the news is that Expedia plans to get all of the company’s data on one platform and aggressively grow its direct-to-consumer business. This is the same advice that we give to hotels who are looking to grow their revenue and improve their operations. 

As we recently wrote in our Guide to Hotel Loyalty, we think the key to revenue success for hotels lies in guest data. We advise:

  1. Maintain a clean database. Know your guests and ensure that your entire team is focused on continuously capturing guest data and updating records to know as much as possible about your guests and their preferences. 
  2. Personalize your guest communications. With a healthy database, you’re now ready to activate guest lifecycle messaging to send the right offers at the right time.
  3. Surprise and delight. With a little extra time and attention, you can start to anticipate what your guests need and want before they even express it.

Hotels have a big leg-up on OTAs. An OTA can only be helpful during the planning phase of the journey, whereas hotels have the ability to own the entire journey. More importantly, hotels that use guest data for personalization have the power to be helpful and delightful at every phase, suggesting the most appropriate upgrade offers before the stay, knowing which amenities will go over well on-property, etc.

The shake-up at Expedia should be a wake-up call to hoteliers about managing expenses and data. While Expedia looks to find its footing again, hotels have a great opportunity to build world-class, data-driven marketing organizations that capture travelers’ attention before, during and after the stay. If you haven’t already realized the power of guest data for marketing and personalizing the stay itself, we invite you to get a demo and discuss how we can help bring your disparate data sources together into one platform.

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